Apr 25, 2023 - Politics

Cleveland, feds will erase nearly $190M in medical debt

Members of Cleveland City Council at a press conference at city hall. A gray-suited Kris Harsh speaks at a lectern.

Councilman Kris Harsh, surrounded by his colleagues, says the U.S. should treat health care as a human right. Photo: Sam Allard/Axios

Upward of 50,000 vulnerable Cleveland households could soon have their medical debt wiped away.

Driving the news: Cleveland City Council yesterday allocated $1.9 million in federal pandemic recovery money to the nonprofit RIP Medical Debt, which estimates it can use those funds to erase roughly $190 million in debt for Cleveland residents.

How it works: RIP Medical Debt persuades local hospital systems to let it purchase portfolios of bad medical debt, which are already for sale on secondary markets.

  • The legislation's sponsor, Kris Harsh, noted at a press conference yesterday that this debt is typically bought by collectors who "hound you to your grave."

Yes, but: RIP Medical Debt is a charitable organization. Once they acquire the debt, they forgive it.

What they're saying: "Medical debt is like a monkey on your back," Harsh said.

  • "It never goes away, you think about it constantly, and it affects your credit score."

By the numbers: There is no application process. RIP Medical Debt will locate recipients who make up to 400% of the federal poverty line or whose medical debt burden represents 5% or more of their annual household income.

Of note: The city's contribution will go toward wiping away the debt of residents within city limits, but it can be leveraged to raise additional philanthropic dollars to make an even larger impact in the region.

What's next: RIP Medical Debt will begin working with local hospitals to acquire the debt portfolios and could begin sending letters to recipients as soon as this summer.


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